Does a Party Waive the Attorney-Client Privilege by Seeking Damages that Include its Attorney’s Fees?

October 5, 2011

Although most courts protect as privileged specific portions of attorneys’ bills that reflect privileged communications, the client can waive that protection. Does a waiver occur when a client seeks to recover damages from a third party that include attorney’s fees it paid?

In United Heritage Property & Casualty Co. v. Farmers Alliance Mutual Insurance Co., No. CIV. 1:10-456 WBS, 2011 U.S. Dist. LEXIS 81875 (D. Idaho July 26, 2011), plaintiff sought to recover from defendant the attorney’s fees and costs it incurred in defending litigation that it claimed was not its responsibility. Plaintiff produced redacted invoices it had received from its lawyer, but the defendant sought additional billing records. The court found that plaintiff “has implicitly waived its attorney-client privilege relating to the records.” Id. at *10. As the court put it, the defendant “needs access to the billing records to be able to defend itself against double billing, inaccurate calculations, wrongly allocated hours, unreasonable rates, or any other inconsistencies.” Id.

It is unclear how far this waiver extended, but litigants should keep in mind the possible waiver ramifications of seeking damages that include their attorney’s fees.